We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Mixed
USD/JPY
Bearish
Gold
Bullish
Oil - US Crude
Bearish
Bitcoin
Bearish
More View more
Real Time News
  • RT @conorsen: @selling_theta @LJKawa https://t.co/vVfmLgHd9b
  • RT @iv_technicals: So you thought it was all contained, right?! Mhm. Cool stuff. https://t.co/PShm600IPS
  • RT @globaltimesnews: #Hubei Province reported 371 new cases of #WuhanCoronavirus and 24 new deaths on Jan 26 local time; total infection ca…
  • What is market volatility and what does a market event volatility look like? Find out from @PaulRobinsonFX here: https://t.co/vg7w10la3j https://t.co/QpD4VP4vDc
  • The last time the $USDJPY suffered this large of a bearish gap in a bearish slide (this one still nascent), was back in May: https://t.co/hTxfyVFiox
  • *Reminder: Weekly Strategy Webinar tomorrow morning at 8:30am EST on DailyFX! - https://t.co/RgnsklZ2Gl
  • Japanese Yen, US Dollar May Gap Higher as Week Starts on Virus Fears $USDJPY #USD #coronarovirus - https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/asia_am_briefing/2020/01/26/Japanese-Yen-US-Dollar-May-Gap-Higher-as-Week-Starts-on-Virus-Fears.html?CHID=9&QPID=917702 https://t.co/RwVEF3rrO6
  • Here is my video to prep for the new trading week: "S&P 500 Tumble Threatens Quiet Bull Channel, #Fed and 4Q #GDP Top Event Risk" https://www.dailyfx.com/forex/video/daily_news_report/2020/01/25/SP-500-Tumble-Threatens-Quiet-Bull-Channel-Fed-and-4Q-GDP-Top-Event-Risk-.html?ref-author=Kicklighter?CHID=9&QPID=917719
  • RT @AFP: #BREAKING Five rockets hit near US embassy in Iraq capital: security source https://t.co/2Brj01kU3R
  • Everyone develops their trading style differently; however, these are two effective strategies for trading $XAUUSD that every trader ought to be aware of: https://t.co/UHmxPVEiQU https://t.co/XrOawSAdqd
USD/CAD Rate Forecast: Monthly Opening Range Warns of Further Losses

USD/CAD Rate Forecast: Monthly Opening Range Warns of Further Losses

2019-12-06 01:00:00
David Song, Currency Strategist
Share:

Canadian Dollar Talking Points

The monthly opening range casts a bearish outlook for USD/CAD as the exchange rate snaps the range-bound price action from the previous week after failing to test the November high (1.3328).

USD/CAD Rate Forecast: Monthly Opening Range Warns of Further Losses

USD/CAD extends the decline following the Bank of Canada (BoC) interest rate decision, and the exchange rate may continue to give back the advance from the October low (1.3042) as it carves a series of lower highs and lows.

The Canadian Dollar may continue to outperform its US counterpart as the BoC tames speculation for lower interest rates, and the central bank may continue to endorse a wait-and-see approach in 2020 as Deputy GovernorTimothy Lane insists that “the current setting of the policy interest rate remains appropriate to keep inflation at our 2 percent target.

The comments suggest the BoC will keep the benchmark interest rate at 1.75% for the foreseeable future amid “easing of concerns about the possibility of a global recession,” and the update to Canada’s Employment report may do little to alter the monetary policy outlook as job growth is expected to recover in November.

Image of DailyFX economic calendar

Canada is anticipated to add 10.0K jobs following the 1.8K decline in October, and a positive development may trigger a bullish reaction in the Canadian Dollar as it encourages Governor Stephen Poloz and Co. to retain a wait-and-see approach for monetary policy.

Nevertheless, the remarks from Mr. Lane suggest the BoC will pay increased attention to the shift in US trade policy as future “interest rate decisions will be guided by our continuing assessment of the economic impact of trade conflicts.

In turn, the BoC may alter the forward guidance for monetary policy in 2020 as the US and China struggle to reach a trade deal, but USD/CAD may continue to track range-bound price action from the third quarter as the Federal Reserve shows a greater willingness to take a break from its rate easing cycle.

With that said, the monthly opening range casts a bearish outlook for USD/CADas the exchange rate snaps the range-bound price action from the previous week after failing to test the November high (1.3328).

Sign up and join DailyFX Currency Strategist David Song LIVE for an opportunity to discuss potential trade setups.

USD/CAD Rate Daily Chart

Image of USD/CAD rate daily chart

Source: Trading View

  • Keep in mind, the rebound from the 2019 low (1.3016) has failed to generate a test of the Fibonacci overlap around 1.3410 (38.2% expansion) to 1.3420 (78.6% retracement), with USD/CAD largely tracking sideways as it remains stuck in the range bounce price action from the third quarter.
  • At the same time, the flattening slopes in the 50-Day (1.3215) and 200-Day SMA (1.3278) warn of range-bound conditions as the moving averages look poised to converge with one another.
  • More recently, USD/CAD appears to have marked a string of failed attempts to test the October high (1.3348), with the monthly opening range for December instilling a bearish outlook as the exchange rate snaps the range-bound price action from the previous week after failing to test the November high (1.3328).
  • At the same time, the Relative Strength Index (RSI) highlights a similar dynamic as the oscillator snaps the upward trend carried over from the previous month.
  • The move below the 1.3220 (50% retracement) region brings the Fibonacci overlap around 1.3120 (61.8% retracement) to 1.3130 (61.8% retracement) on the radar, with the next area of interest coming in around 1.3030 (50% expansion), which largely lines up with the 2019 low (1.3016).

Additional Trading Resources

Are you looking to improve your trading approach? Review the ‘Traits of a Successful Trader’ series on how to effectively use leverage along with other best practices that any trader can follow.

Want to know what other currency pairs the DailyFX team is watching? Download and review the Top Trading Opportunities for 2019.

--- Written by David Song, Currency Strategist

Follow me on Twitter at @DavidJSong.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.